Knight Frank global residential cities index, which comprises 43 cities across all continents
As one year comes to a close and another one starts, it’s interesting to take a look at some salient points from the previous 12 months and so here is a roundup of annual house prices in the world’s biggest cities as tracked by the Knight Frank global residential cities index, which comprises 43 cities across all continents.
European cities experienced a very mixed bag last year. On the one hand, Edinburgh and Madrid saw the second and third-highest year-on-year price rises out of all the cities surveyed (10.6% and 10.1% respectively). However, Dublin and London both saw prices fall by 1.7% and 2.9% respectively.
While it may be tempting to view everything which happens in the European property market as being somehow linked to Brexit, the facts do not support this and, as is often the case, it pays to take a closer look. Madrid is the capital of Spain and the Spanish property market has spent a long time in the doldrums, now that it is finally coming back to life, strong price growth is to be expected.
Edinburgh is in a similar situation to the north of England in that it has seen major economic growth over recent years, which is reflected in the strength of its housing market. Dublin and London, by contrast, have long been notorious for their high house prices and are now facing increasing competition from other locations where property is more affordable.
This is particularly true of London which has both internal competition from other parts of the UK and external competition from the EU and beyond. This does not mean that either market is in crisis, just that both markets are due some time to cool off.
Some Asian tigers are still roaring, others are grumbling. Singapore topped the list for year-on-year price growth at an impressive 13.1%. Hong Kong, by contrast, only saw annual growth of 5.5%, while prices actually fell in Taipei and Istanbul.
In this context, it’s worth noting that Singapore and Hong Kong routinely battle for top place in Asia’s property market as both have very similar situations, namely powerful economies, lots of international interest and very limited land. Notwithstanding this, however, both governments have been looking to cool their local markets, with the results already being seen in Hong Kong and beginning to show in Singapore where growth is slowing.
Interestingly, although the New Zealand government has been trying to cool its housing market by prohibiting sales of existing homes to non-resident buyers, the prime market (excluding new homes) still saw annual growth of 8.5%.
Given that many of the countries in the Americas are huge housing markets in their own right, it’s unsurprising that the picture which emerges here is one of massive variation both within the region, within countries in the region and even within local areas in each country. In Canada, for example, Toronto is powering ahead while Vancouver is lacklustre.
The Middle East
Overall, property prices in Dubai were down 3.8%. However, as anyone familiar with the Dubai property market will know, that housing market doesn’t tend to stay down for long.